The Company A expects their production revenue in 2021 become RM250,500 with the overallfixed cost (FX) RM60,000 and variable cost (VC) RM100,000. The standard deviation ofrevenue, FC and VC are described in TableRevenueFixed CostVariable CostЕxpected250,50061000110000St. Dev.15500410041000If the distribution the simulation is assumed NORMAL, by using Monte-carlo method in excel:a. Calculate the expected profit in the first calculation.b. Identify the calculation of 700 iterations for Mean, Standard Deviation, minimal andmaximal value.c. Calculate potential risk of loss for 700 iterations.

A normal distribution is a symmetrical probability distribution with a bell-shaped curve. Most data…

The Company A expects their production revenue in 2021 become RM250,500 with the overall fixed cost (FX) RM60,000 and variable cost (VC) RM100,000. The standard deviation of revenue, FC and VC are described in Table Expected St. Dev. Revenue 250,500 15500 Fixed Cost 61000 4100 Variable Cost 110000 41000 If the distribution the simulation is assumed NORMAL, by using Monte-carlo method in excel: c. Calculate potential risk of loss for 700 iterations. a. Calculate the expected profit in the first calculation. b. Identify the calculation of 700 iterations for Mean, Standard Deviation, minimal and maximal value.

The Company A expects their production revenue in 2021 become RM250,500 with the overall fixed cost (FX) RM60,000 and variable cost (VC) RM100,000. The standard deviation of revenue, FC and VC are described in Table Expected St. Dev. Revenue 250,500 15500 Fixed Cost 61000 4100 Variable Cost 110000 41000 If the distribution the simulation is assumed NORMAL, by using Monte-carlo method in excel: c. Calculate potential risk of loss for 700 iterations. a. Calculate the expected profit in the first calculation. b. Identify the calculation of 700 iterations for Mean, Standard Deviation, minimal and maximal value.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 8MC

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